Melbourne Institute of Applied Economic and Social Research - Research Publications

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    Private Protection and Public Policing
    Hickey, R ; Mongrain, S ; Roberts, J ; van Ypersele, T (Melbourne Institute, 2019-03-01)
    This paper looks carefully at situations in which public and private protection are complementary, that is, when private protection must be coordinated with public protection to be effective. For example, home alarms deter theft by being connected to a local police station: if the police do not respond to a home alarm, the home alarm on its own is virtually useless in halting a crime in action. We make a distinction between gross and net complementarity and substitution, where the latter takes into account the effect on the crime rate. We show that when public and private protection are complements the optimal provision of public protection trades offs the manipulation effect of encouraging private protection with the compensatory effect of providing protection to households that do not privately invest. We discuss the implications of our results for policy and empirical research in this area.
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    The impact of COVID-19 on GPs and non-GP specialists in private practice
    Scott, A (Melbourne Institute of Applied Economic and Social Research, 2020)
    The healthcare system in Australia has not been overwhelmed by the COVID-19 pandemic as initially expected. Nevertheless, there have been significant changes in the use of healthcare from the suspension of non-urgent elective surgery, social distancing restrictions that have discouraged people from leaving home, public fear of contracting or spreading the virus in health facilities, and increased household financial pressure that reduces the affordability of out-ofpocket payments. The aim of this report is to examine the impact of the COVID-19 pandemic on General Practitioners (GPs) and non-GP specialists working in private practice. It examines the short-term effects on doctors’ working patterns and mental health, how doctors have responded and how they have been supported during the pandemic. New evidence is presented from the Medicine in Australia: Balancing Employment and Life (MABEL) COVID-19 Short Online Survey (SOS) – MABEL COVID-19 SOS – which was completed by a representative sample of 2,235 GPs and non-GP specialists between 14 and 24 May 2020, with comparison to the MABEL Wave 11 survey conducted in 2018-19.
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    Nursing Home Competition, Prices and Quality: A Review and Some Lessons for Australia
    Yang, O ; Yong, J ; Scott, A (Melbourne Institute of Applied Economic and Social Research, 2020-06-01)
    In recent years, with the aim of containing cost pressure and improving efficiency, many countries have begun to introduce market mechanisms into the aged care sector. Under the right conditions, competition can spur providers to compete by cutting costs, offering better prices and higher quality of services. However, in aged care, market failures can be severe. Information about prices and quality may not be readily available and search costs can be high. This study undertakes a scoping review of the literature on competition in the nursing home sector, with an emphasis on research examining how competition affects prices and quality of care. Online databases were used to identify studies in English language published between 1988–2020. A total of 44 publications covering nine countries are included in this review. On the relationship between competition and quality, the literature offers conflicting evidence. Some studies find greater competition leading to higher quality, while others find the opposite effect. Institutional features such as the presence of binding supply restrictions on nursing homes and public release of information on quality appear to be important considerations. On the price effect of competition, most studies find that greater competition tends to result in lower prices, although the effect is small. The literature offers several lessons for Australia, including whether increasing subsidies can result in higher quality and the role of public reporting of quality ratings in fostering competition.
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    Financial Stress and Household Consumption: Exploring households’ commitment to contractual payments
    Settle, A (Melbourne Institute of Applied Economic and Social Research, 2020-11-01)
    In a context of increasing attention to growing fixed payments, slim buffers, and unstable incomes in the household sector, this analysis considers the degree to which households prioritise contractual payments. The study uses Australian household expenditure data to examine which expenditure categories are prioritised when households enter into financial stress. The analysis finds that financially stressed households maintain basic expenditure and contractual payments by reducing expenditure on insurance along with more conventional discretionary spending. These findings suggest that insurance is effectively considered a luxury good. The findings thus point towards a sharp rise in risk exposure that accompanies the early stages of financial stress as households absorb shocks in order to maintain the stability of contractual payments. The findings have important implications for how we understand household sensitivity to shocks and the behaviour of households with regards to risk management, as well as the capacity of private insurance markets to stabilise the household sector. The findings also feed directly into broader questions about how the distribution of risk is evolving as household balance sheets expand.
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    The New Normal: Navigating an Economic Recovery
    Lim, G ; Nguyen, V ; Robinson, T ; Tsiaplias, S (Melbourne Institute of Applied Economic and Social Research, 2020)
    On the road to economic recovery, a pickup in household consumption is key, but GDP growth could be weighed down by low growth in population and wages. Australia is a small-open economy, and is materially affected by developments abroad, through trade in goods and services, financial factors, and the international movement of people. COVID-19, lockdowns, and the closure of borders have had a massive negative pervasive impact on Australia’s economic performance in 2020. Overall, GDP plummeted by a record 7 percent in the June quarter following a small fall of 0.3 percent in the March quarter (Australian National Accounts, June Quarter 2020). Australia entered its first technical recession since 1991, with hours worked falling heavily, and underemployment spiking.
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    Does poverty in childhood beget poverty in adulthood in Australia?
    Vera-Toscano, E ; Wilkins, R (Melbourne Institute of Applied Economic and Social Research, 2020-10-01)
    Analysis of the intergenerational transmission of economic disadvantage and entrenched poverty is concerned with discovering the extent to which an individual’s socio-economic outcomes as an adult depend on the economic fortunes of his or her parents. This includes examining the level to which children who grew up in poor households perform worse in terms of educational attainment, labour market outcomes, health status and even life satisfaction and well-being, than their peers who grew up in better-off households. This report provides new empirical evidence that the length of time children live in households experiencing income-based disadvantage is a predictor of other forms of disadvantage experienced by early adulthood. This analysis explores the extent and structure of this form of intergenerational transmission of disadvantage, and especially entrenched income-based poverty, in Australia. The analysis draws on the Household, Income and Labour Dynamics in Australia (HILDA) Survey to examine a cohort born between 1986 and 1992 over the 18-year period from 2001 to 2018. The HILDA Survey is a unique longitudinal dataset which is well suited to the study of the transmission of poverty across generations in Australia. This survey is nationally representative and contains rich information on individuals’ personal, family and household characteristics, economic circumstances educational outcomes and labour market activity, and furthermore allows us to match parents to their children. The results suggest that low household income during childhood is a key predictor of disadvantage in later life (as a young adult) and therefore an important indicator to guide policy interventions to break intergenerational cycles of disadvantage.
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    Private or Public? The declining growth in the use of private healthcare in Australia
    Bai, T ; Mendez, S ; Scott, A ; Yong, J (Melbourne Institute of Applied Economic and Social Research, 2020-10-01)
    The past five years has seen a steady decline in private health insurance (PHI) membership in Australia. With rising premium prices and out-of-pocket costs, private healthcare has become increasingly unaffordable in an era of low wage growth. Given the private health sector relies heavily on PHI funding, this Research Insight explores how the decline in private health membership has affected the private hospital sector in Australia.
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    How to reduce the social cost of binge drinking in Australia?
    Yang, O ; Zhao, X ; Srivastava, P (Melbourne Institute of Applied Economic and Social Research, 2020-02-01)
    There is substantial cross-country evidence that binge drinking has significant social costs. In this study we add to the growing body of evidence on the association between problem drinking and antisocial and unlawful behaviours using data from the Australian National Drug Strategy Household Survey (NDSHS) administered by the Australian Institute of Health and Welfare (AIHW).
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    Should hospital funding be linked to socioeconomic status?
    Yong, J ; Yang, O (Melbourne Institute of Applied Economic and Social Research, 2020-07-01)
    How does socioeconomic status impacts one's health and their access to healthcare? Using records from the Victorian Department of Health and Human Services, this Research Insight classifies patients into four socioeconomic groups according to their use of health and human services. The study also measures hospital use and whether socioeconomic status with in-hospital adverse incidents. The author, Associate Professor Jongsay Yong suggests that hospital funding policy should account for patients' socioeconomic differences.
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    Behind closed doors: the surge in mental distress of parents
    Broadway, B ; Mendez, S ; Moschion, J (Melbourne Institute of Applied Economic and Social Research, 2020-08-01)
    The economic downturn caused by the COVID-19 pandemic and its subsequent restrictions has had an alarming effect on Australians' mental health. Particularly worrying is the increase in high mental distress among parents, especially among non-employed fathers and parents of primary school aged children. Financial stress and work-family conflict tend to be the two major sources of mental distress for parents. Using data from the Melbourne Institute's Taking the Pulse of the Nation survey and the Household, Income and Labour Dynamics in Australia (HILDA) Survey, this Research Insight examines the surge in mental distress in parents compared to pre-COVID. The study identifies who has been most impacted, looking at how it impacts mothers and fathers, and how employment status and the age of the child can influence mental distress.